ESPR, CSRD and SFDR: how unsold products disclosure connects to ESG reporting

Q: Can the ESPR disclosure replace CSRD waste reporting?

No. ESPR covers only discarded unsold consumer products. CSRD waste reporting under ESRS E5 covers all waste streams. However, ESPR data can be referenced within the CSRD report for additional granularity.

Q: Which ESRS standard does ESPR data align with?

ESRS E5 (Resource use and circular economy), particularly metrics on waste generation, waste treatment, and circular economy practices.

Q: How will fund managers access ESPR data for SFDR reporting?

From the company's website or CSRD management report. Where embedded in CSRD, it reaches investors through established SFDR data collection channels.

Q: Does ESPR data feed into EU Taxonomy alignment assessment?

Indirectly. Waste treatment percentages and prevention measures from ESPR disclosures can support Taxonomy alignment under the circular economy objective.

The ESPR does not exist in isolation. For companies already navigating the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR), the unsold consumer products regime creates a new data stream that feeds directly into existing reporting and due diligence workflows. This article maps the connections.

How the three frameworks connect

Each framework addresses a different stage in the sustainability data chain — but the data flows between them.

ESPR

Generates product-level
waste and circularity data

→

CSRD

Hosts the disclosure within
the management report

→

SFDR

Uses the data for PAI
reporting and fund disclosures

Step 1 — ESPR generates

Product waste data

Units discarded, weight, reasons, waste treatment breakdown (reuse, recycling, recovery, disposal), and prevention measures — per CN code, per financial year.

Step 2 — CSRD hosts

Integrated disclosure

Under Article 2(2) of the Implementing Regulation, the Annex I disclosure can sit inside the CSRD management report. One report, one workflow, one assurance process.

Step 3 — SFDR consumes

PAI indicator inputs

Fund managers extract ESPR data from investee CSRD reports to populate waste, circular economy, and hazardous substance PAI indicators at entity and fund level.

ESPR data mapped to SFDR PAI indicators

Several ESPR disclosure data points directly feed into SFDR Principal Adverse Impact indicators. Fund managers monitoring consumer goods holdings can use ESPR disclosures as a primary data source for the following PAIs.

PAI indicator 13 — Table 1

Non-recycled waste ratio

ESPR source → waste treatment breakdown (disposal + other recovery as % of total discarded weight)

PAI indicator 9 — Table 2

Hazardous waste and radioactive waste ratio

ESPR source → reason-for-discarding field (derogation (a) dangerous products indicates hazardous material presence)

Additional indicator — Table 3

Investments in companies without waste reduction policies

ESPR source → prevention measures narrative (both measures taken and measures planned)

EU Taxonomy alignment

Circular economy environmental objective

ESPR source → preparing-for-reuse % and recycling % indicate investee circularity performance

CSRD integration: two reporting options

Companies subject to both ESPR and CSRD have a choice in how they publish the Annex I disclosure.

Option A: standalone website disclosure

Publish the Annex I disclosure on an easily accessible page of the company website. The data sits independently of the CSRD report. Simpler to implement initially but creates a separate data governance workflow.

Option B: embed within CSRD management report

Include the Annex I disclosure within the sustainability section of the management report. Add a website link indicating where it appears. One reporting process, one assurance cycle, and the data becomes accessible to investors through established CSRD channels.

Practical recommendation

For companies already in scope for CSRD, Option B is the more efficient long-term approach. The ESPR data fields — product categories, waste treatment percentages, prevention measures — align naturally with ESRS E5 (Resource use and circular economy) disclosure requirements. Integrating them from the outset avoids duplicating data collection and governance.

Derogation patterns as ESG risk signals

The ESPR regime creates a new category of structured, comparable data that ESG analysts have not had before. The pattern of derogation usage by a company tells a story about its operations.

Overproduction signal: repeated reliance on derogation (h) — products offered for donation but not accepted — suggests the company is manufacturing beyond demand. Products are neither defective, damaged, nor IP-restricted; they are simply unsold.

Supply chain quality signal: high volumes under derogation (f) — damaged products where repair is not feasible — may point to handling issues in warehousing, logistics, or returns management.

Circular economy signal: a high preparing-for-reuse percentage in the waste treatment breakdown indicates the company is channelling unsold products into reuse pathways rather than directly destroying them — a positive circularity indicator.

Transparency signal: a high percentage of “unknown” waste treatment operations is flagged by national authorities as a risk factor. For investors, it signals weak data governance or insufficient engagement with waste treatment operators.

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Frequently asked questions

Can the ESPR disclosure replace CSRD waste reporting?

No. The ESPR disclosure covers a specific and narrow scope — discarded unsold consumer products. CSRD waste reporting under ESRS E5 covers all waste streams across the organisation. However, the ESPR data can be referenced within the CSRD report to provide additional granularity on unsold product waste specifically.

Which ESRS standard does ESPR data align with?

ESPR disclosure data aligns most closely with ESRS E5 (Resource use and circular economy), particularly the metrics on waste generation, waste treatment operations, and circular economy practices. The prevention measures narrative also connects to ESRS E5 transition plan disclosures.

How will fund managers access ESPR data for SFDR reporting?

ESPR disclosures must be published on the company’s website or within a CSRD management report. Fund managers can access them directly from these sources. Where the disclosure is within a CSRD report, it reaches investors through the same channels already used for SFDR due diligence data collection.

Does ESPR data feed into EU Taxonomy alignment assessment?

Indirectly. Companies operating in ESPR-covered product categories that seek Taxonomy alignment under the circular economy environmental objective can use ESPR disclosure metrics — particularly waste treatment percentages and prevention measures — as supporting evidence. The preparing-for-reuse and recycling percentages are especially relevant.